Q: Beyond offering
great customer service, what can I do to make more sales and keep
customers coming back?

A: The notion of
customer loyalty seems almost quaint today, when shoppers openly
defect to competitors that offer lower prices. But the good news
for merchants is that shrewd shoppers also value flexibility,
convenience and security. And a simple way for merchants to
de-emphasize price-and attract more business-is to offer customers
other incentives to shop, such as a wider range of payment options
or the ability to earn loyalty card rewards.

Thanks to smarter payment technology and changes in consumer
attitudes, electronic payments have become more prevalent than
ever. MasterCard International, one of the world's largest
credit card networks, reports that its branded cards were used in
more than 11.6 billion transactions in 2001, generating a gross
dollar volume of $986 billion. This almost trillion-dollar
volume is up 17.6 percent from 2000.

It's no mystery why the number of e-payments is growing.
Consumers love credit cards because they are easy to use, offer
increased buying power and are safer to carry than cash. Debit
cards offer shoppers another fast, secure way to pay. And
electronic checks-secure transactions that verify the availability
of funds and automatically transfer money-represent a third,
increasingly popular alternative to cash.

For store owners, accepting these electronic payments has never
been easier. Merchant accounts can be approved in as little as 24
hours. And payment solutions exist for virtually every type of
business, from restaurants and online retailers to mobile merchants
and homebased enterprises. Best of all, business owners don't
have to pay upfront for terminals, printers or software because
most payment providers offer short- and long-term equipment
leases.

Merchants who offer more payments options to their customers
enjoy many advantages, including:

Access to a wider customer base.

Higher frequency of sales.

Larger ticket amounts per sale.

Increased customer traffic.

Augmented revenue from customer impulse buys.

Strengthened credibility.

Lower incidences of employee theft.

In addition to credit, debit and e-check acceptance, businesses
are using gift and loyalty cards to attract and keep customers.
Research shows their efforts pay off. In a national survey on
plastic card usage, 45 percent of respondents said they spent more
money at stores where they were loyalty program members. The same
study revealed that gift cards, like loyalty cards, help merchants
increase store traffic and boost incremental sales. Approximately
55 percent of survey respondents who have received gift cards
reported that they needed more than one trip to deplete the value
stored on their cards. In addition, the majority of return shoppers
said they spent more than their cards' initial value.

Not surprisingly, many businesses that once offered gift
certificates have traded in paper for plastic. Card
Marketing magazine estimates that by 2005, plastic cards will
represent 80 percent of the gift certificate market, a total of
about 850 million cards. The advantages plastic cards offer
merchants are undeniable. For one, retailers no longer have to
refund cash for unspent balances. To storeowners, this means more
positive cash flow and repeat business. Plastic cards are also
great advertising tools because they are brandable, durable and are
easily carried by shoppers. Equally important, the cards are much
more difficult to forge than paper gift certificates.

And that's just the beginning. A business owner can also use
the information encoded on a gift card's magnetic stripe to
determine where and when the card was purchased, where and when it
was used, and what the card recipient bought. In addition to these
benefits, loyalty cards offer merchants even more options,
including the ability to:

Track customer behavior and history.

Allow cardholders to earn points toward rewards.

Overcome slow sales by offering extra points on purchases made
during off-peak seasons.

Encourage customers to spend more by offering bonus points for
purchases over certain amounts.

The list of benefits grows as payment technology gets both
smarter and more economical. But the bottom line remains the same:
One of the best ways to attract new business while maintaining
existing customers is to offer shoppers more ways to pay for goods
and services. Payment flexibility helps clinch sales and encourages
new customers to return.

Cardservice International Senior Vice President of
Sales John Burtzloff is in charge of sales strategy and
execution and thus is responsible for managing all aspects of the
company's marketing, communications, telesales, check
guarantee, new accounts and sales support activities.

The opinions expressed in this column are
those of the author, not of Entrepreneur.com. All answers are
intended to be general in nature, without regard to specific
geographical areas or circumstances, and should only be relied upon
after consulting an appropriate expert, such as an attorney or
accountant.